Creating Combo Options Spreads

Note: When creating CME strategies in the Strategy Creation window using X_TRADER® 7.17.65 or higher, the Strategy Type is dynamically selected based on the legs:

When a combination of futures and option make up the legs, the Price and Delta fields become enabled for the futures leg and Covered is displayed as the strategy type.

When a strategy is configured for only options, Combo is displayed as the strategy type.

To create a Combo option spread...

Select (the Create Strategy icon)
from the X_TRADER Control Panel. This displays the Create Strategy window.

Use Instrument Explorer to
compose Leg 1 of the strategy.

Click the Leg
1 Contract field to invoke Instrument Explorer.

Select the market (e.g.,CME)
where you would like to create the strategy.

Select OPTION in
the Product Type field. This displays options in the Product field.

Select the product (e.g.,
6A) in the Product field. This displays all deliverable strike
prices in the Instrument field.

Select the desired strike
price in the Instrument field.

Click OK to
add the instrument to the Creation pane.

Repeat step 2 to select
instruments for each additional leg.

Use the Buy/Sell (B/S) button
to declare if you are buying or selling each leg.

Use the Quantity field
to set up ratio spreads. You may accept the quantity of one (1)
or enter a different quantity using the keyboard.

Click the Create button.
This submits the strategy to the exchange for validation. Once validated,
the strategy displays in the Saved Strategies pane and Market
Explorer.

Once created, the validated Combos
displays in the Saved Strategies pane and Market Explorer.

If the validated
strategy is comprised of legs that fit the structure of exchange-recognized spread
types (e.g., Straddle, Strangle, Butterfly, etc.), the strategy
displays with the exchange-recognized spread name.

If the validated strategy
is comprised of legs that do not fit the structure of an exchange-recognized
spread type, the strategy displays as Misc. Call/Put Spread.

Tip: The Audit Trail displays
strategy creation messages and provides details when the exchange does
not validate the strategy.